Search

02/09/22 Briefing


The S&P 500 futures are up 1 point and are trading slightly above fair value. The Nasdaq 100 futures are down 3 points and are trading slightly below fair value. The Dow Jones Industrial Average futures are up 4 points and are trading slightly above fair value.

Market participants lack conviction in the premarket trade with equity futures mixed ahead of the August Jobs Report at 8:30 a.m. ET.

Overseas, Chinese tech hub Shenzhen is extending Covid curbs on public activities, but stopped short of a full lockdown, according to Reuters.

Energy complex futures are mixed with WTI crude oil futures up 1.7% to $88.09/bbl while natural gas futures are down 3.1% to $8.98/mmbtu.

Treasury yields are modestly lower with the 2-yr note yield down six basis points to 3.47%. The 10-yr note yield is down one basis point to 3.25%.

The closely watched August Jobs Report includes: Nonfarm Payrolls (Briefing.com consensus 300,000; prior 528,000), Nonfarm Private Payrolls (Briefing.com consensus 280,000; prior 471,000), Average Hourly Earnings (Briefing.com consensus 0.4%; prior 0.5%), Unemployment Rate (Briefing.com consensus 3.5%; prior 3.5%), and Average Workweek (Briefing.com consensus 34.6; prior 34.6).

At 10:00 a.m. ET, July Factory Orders (Briefing.com consensus 0.2%; prior 2.0%) will be released.

In corporate news:

  • Starbucks (SBUX 85.48, +0.08, +0.09%): confirms Laxman Narasimhan as next CEO, effective April 2023; will be incoming CEO on October 1, 2022

  • lululemon athletica (LULU 322.64, +28.19, +9.57%): beats by $0.34, beats on revs; guides OctQ EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • PagerDuty (PD 25.51, +1.41, +5.85%): beats by $0.04, beats on revs; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line

  • Broadcom (AVGO 502.35, +10.34, +2.10%): beats by $0.18, reports revs in-line; guides OctQ revs above consensus

  • Amazon (AMZN 127.44, -0.38, -0.30%): A labor official believes Amazon (AMZN) union victory at New York location should be upheld, according to The Wall Street Journal

  • Dow (DOW 49.33, -0.63, -1.26%): downgraded to Neutral from Overweight at JP Morgan

  • Smartsheet (SMAR 30.90, +0.08, +0.26%): beats by $0.10, beats on revs; guides Q3 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Friday little changed as markets turned their attention to the U.S. employment report and what it could mean for the Fed's monetary policy. Japan's Nikkei: -0.04% (-3.4% for the week), Hong Kong's Hang Seng: -0.7% (-3.6% for the week), China's Shanghai Composite: -0.05% (-1.5% for the week), India's Sensex: +0.06% (-0.05% for the week), South Korea's Kospi: -0.3% (-2.9% for the week), Australia's ASX All Ordinaries: -0.3% (-3.9% for the week).

  • In economic data:

  • South Korea's August CPI -0.1% month-over-month (+0.3% expected; last +0.5%) and +5.7% year-over-year (+6.1% expected; last +6.3%)

  • Japan's Monetary Base +0.4% year-over-year (+3.1% expected; last +2.8%)


  • In news:

  • It was a losing week overall for the major Asian indices, as investor sentiment was undercut by growth concerns, weakening currencies, and the poor performance of other foreign markets.

  • South Korea reported a softer-than-expected CPI print for August, but the Bank of Korea said it expects inflation to remain at 5.0-6.0% for an extended period.

  • The yen continues to weaken against dollar, taking out the 140 level and trading at a 24-year low against the greenback.

  • Chengdu remains in lockdown for Covid testing while parts of Shenzhen are also in lockdown, according to Bloomberg.

  • China set the yuan reference rate at 6.8917, which is the weakest since August 2020.



  • Major European indices have traded with a positive bias in front of the U.S. employment report, garnering some buying interest after Wall Street finished Thursday with a rebound-minded bias. STOXX Europe 600: +0.5%, Germany's DAX: +1.2%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.5%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.1%.

  • In economic data:

  • Eurozone's July PPI +4.0% month-over-month (+2.5% expected; last +1.3%) and +37.9% year-over-year (+35.8% expected; last +36.0%)

  • Germany's July exports -2.1% month-over-month (-2.3% expected; last +4.2%) and imports -1.5% month-over-month (+0.8% expected; last +0.1%)


  • In news:

  • The upside move today comes despite eurozone PPI hitting a record high 37.9% year-over-year in July.

  • According to a Bloomberg survey, most economists expect the ECB to raise its key lending rate by 75 basis points at next week's meeting.

  • Germany put up some soft trade numbers for July, adding to concerns about a potential recession brewing for the eurozone.

  • The London Times reports that UK Chancellor Zahawi is pushing for some business support measures that were used during the Covid pandemic. EUR/USD +0.4% to 0.9988.



U.S. equity futures:

  • S&P 500 Futures: +3 @ 3,969

  • DJIA Futures: +11 @ 31,667

  • Nasdaq 100 Futures: -2 @ 12,272

Overseas:

  • Europe: DAX +1.2%, FTSE +0.5%, CAC +0.5%

  • Asia: Nikkei -0.04%, Hang Seng -0.7%, Shanghai Composite -0.05%

Commodities:

  • Crude Oil +1.55 @ 88.16

  • Nat Gas -0.300 @ 8.962

  • Gold +7.80 @ 1717.10

  • Silver +0.119 @ 17.785

  • Copper -0.0120 @ 3.3945

U.S. Summary:

  • Earnings/Guidance:

  • Broadcom (AVGO) beats by $0.18, reports revs in-line; guides OctQ revs above consensus

  • Calavo Growers (CVGW) misses by $0.18, beats on revs

  • HashiCorp (HCP) reports Q2 net loss per share of $(0.17), no estimates, vs. $(0.35) in year-earlier period; revenue increased 52% yr/yr to $113.9 mln; issues guidance for Q3 and FY23

  • JOANN Inc. (JOAN) misses by $0.15, beats on revs, comps -6.2%

  • lululemon athletica (LULU) beats by $0.34, beats on revs; guides OctQ EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs above consensus

  • nCino (NCNO) beats by $0.04, beats on revs; guides Q3 EPS above consensus, revs above consensus; guides FY23 EPS above consensus, revs in-line

  • Oxford Industries (OXM) beats by $0.13, reports revs in-line; guides Q3 EPS in-line, revs above consensus; guides FY23 EPS above consensus, revs in-line

  • PagerDuty (PD) beats by $0.04, beats on revs; guides Q3 EPS above consensus, revs in-line; guides FY23 EPS above consensus, revs in-line

  • Quanex (NX) beats by $0.17, beats on revs, reaffirms FY22 guidance

  • Senseonics' (SENS) CFO, Nick Tressler, transitioning from his position; Rick Sullivan, current Vice President of Finance, appointed to succeed Mr. Tressler as CFO

  • Smartsheet (SMAR) beats by $0.10, beats on revs; guides Q3 EPS in-line, revs below consensus; guides FY23 EPS above consensus, revs below consensus

  • Sportsman's Warehouse (SPWH) beats by $0.10, beats on revs, comps of -9.4%; guides Q3 (Oct) EPS below consensus, revs below consensus, expects comps of -17% to -12%


  • General News:

  • Residents of China technology hub Shenzhen fear lockdown. Entertainment and restaurants are closed, according to Bloomberg

  • UN officials are looking at Zaporizhzhia nuclear plant, according to the New York Times

  • Atlanta Fed Pres Bostic says Fed's campaign to cool inflation not complete, according to Bloomberg

  • China will implement audit agreement with US, according to Reuters

  • CDC recommends the first updated COVID-19 booster

  • Amazon (AMZN): A labor official believes Amazon union victory at New York location should be upheld, according to the Wall Street Journal

  • Apple (AAPL) overtook Android (GOOG) to gain 50% market share of smartphones in US, according to Financial Times

  • Bayer's (BAYRY) Kerendia receives updated label in the U.S. to include findings from Phase III FIGARO-DKD cardiovascular outcomes study

  • CME Group (CME) reports 22% ADV growth in August 2022

  • Credit Suisse (CS) could eliminate 5000 jobs, according to Reuters

  • Hollysys (HOLI) mulling going private at $1.8 bln valuation, according to Reuters

  • HSBC Holdings (HSBC): Federal Reserve Board announces termination of enforcement action with HSBC

  • Intellia Therapeutics (NTLA) Receives U.S. FDA Orphan Drug Designation for NTLA-2002, an Investigational CRISPR Therapy for the Treatment of Hereditary Angioedema

  • International Seaways (INSW) issues statement in response to Famatown

  • James Hardie (JHX) appoints Aaron Erter as Chief Executive Officer

  • MAXIMUS (MMS) awarded contract with a total value of $6.6 bln by the Centers for Medicare & Medicaid Services for Contact Center Operations

  • Meta (META) and Qualcomm (QCOM) sign agreement on virtual reality chipsets, according to Reuters

  • nCino's (NCNO) Bank Operating System selected by Rabobank Australia and New Zealand

  • Rocket Lab USA (RKLB) successfully test fires reused Rutherford first stage engine for the first time

  • Shell (SHEL) considering four candidates to replace CEO Ben van Beurden, according to Reuters

  • SPX Corp (SPXC) CFO James Harris to resign to accept a position with another firm, effective September 23

  • Starbucks (SBUX) confirms Laxman Narasimhan as next CEO, effective April 2023; will be incoming CEO on October 1, 2022

  • Stewart Info (STC) increases quarterly dividend by 20% to $0.45/sh

  • Sunnova Energy (NOVA) applies to California Public Utilities Commission to develop a solar and storage focused 'micro-utility' in California

  • Toll Brothers (TOL) enters into a $192.5 mln settlement agreement with Southern California Gas Company to resolve its claims associated with a natural gas leak

  • Wendy's (WEN): CDC says E. coli Outbreak has spread to six states


  • M&A:

  • Barrick (GOLD) sells Royalty Portfolio to Maverix Metals for total consideration of up to $60 million

  • Exxon Mobil (XOM) signs agreement to sell all interests in the Aera oil-production operation in California to Green Gate Resources E

  • FARO Techs (FARO) acquires UK-based GeoSlam for 22.0 mln; expects acquisition to be accretive to 2023 non-GAAP EPS

  • ICF International (ICFI) to acquire Blanton & Associates, an environmental consulting, planning and project management firm headquartered in Austin, Texas; terms of deal not disclosed

  • Ooma (OOMA) acquires Junction Networks

  • Ryder System (R) acquires Baton, a logistics technology start-up

  • Ryerson (RYI) announces acquisition of Howard Precision Metals, an aluminum producer based in Milwaukee, Wisconsin; terms not disclosed

  • Shell plc (SHEL) to sell its stake in Aera Energy LLC to IKAV for $2 bln

  • Smartsheet (SMAR) acquires Outfit, a brand management, templating and creative automation platform; transaction expected to be neutral to FY23 non-GAAP EPS and free cash flow, accretive thereafter

  • Sun Life (SLF) to acquire a majority stake in Advisors Asset Management


  • Syndicate:

  • Activision Blizzard (ATVI) files mixed securities shelf offering

  • Continental Resources (CLR) files mixed securities shelf offering

  • FREYR Battery (FREY) files for $500 mln mixed securities shelf offering; also files for 24.625 mln ordinary share offering; also files for 118,968,753 ordinary share offering by selling shareholders, relates to warrants

  • Humacyte (HUMA) files for 89,716,840 share common stock offering by selling shareholders, relates to warrants; files for $300 mln mixed securities shelf offering

  • National Bank (NBHC) files mixed securities shelf offering

  • Momentus (MNTS) files for $200 mln mixed securities shelf offering

  • Starbucks (SBUX) files mixed securities shelf offering

  • Tango Therapeutics (TNGX) files for $400 mln mixed securities shelf offering


  • IPOs:

  • Expected to Price:

  • No IPOs expected.



Gapping Up/Down

  • Gapping up:

  • HCP +12.4%, LULU +9.7%, PD +8.7%, HUMA +8.4%, RKLB +4%, NCNO +3.8%, OOMA +3.5%, MNTS +3.5%, MMS +2.8%, SHEL +2.1%, GOLD +1.9%, XOM +1.7%, FREY +1.6%, AVGO +1.5%, HSBC +1.4%, NOVA +1%, NTLA +0.7%


  • Gapping down:

  • OXM -4.8%, NX -1.8%, SPWH -1.4%, RYI -0.5%


Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • Nordex (NRDXF) upgraded to Buy from Neutral at Citigroup

  • Okta (OKTA) upgraded to Neutral from Sell at Guggenheim; tgt lowered to $65

  • Salesforce (CRM) upgraded to Neutral from Sell at Guggenheim; tgt $150


  • Downgrades:

  • Air Liquide (AIQUY) downgraded to Neutral from Conviction Buy at Goldman

  • Arkema S.A. (ARKAY) downgraded to Neutral from Buy at Goldman

  • Azure Power (AZRE) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $5

  • Dow (DOW) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $47

  • Givaudan SA (GVDNY) downgraded to Sell from Neutral at Goldman

  • Henkel AG (HENKY) downgraded to Sell from Neutral at Goldman

  • LyondellBasell (LYB) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $80

  • NVIDIA (NVDA) downgraded to Neutral from Outperform at Daiwa Securities; tgt lowered to $133

  • Tilly's (TLYS) downgraded to Neutral from Buy at Seaport Research Partners


  • Others:

  • CrowdStrike (CRWD) initiated with a Neutral at Atlantic Equities; tgt $200

  • Fortinet (FTNT) initiated with an Overweight at Atlantic Equities; tgt $76

  • Palo Alto Networks (PANW) initiated with a Neutral at Atlantic Equities; tgt $495

  • PROCEPT BioRobotics (PRCT) initiated with an Overweight at Wells Fargo; tgt $49

  • Relay Therapeutics (RLAY) initiated with a Buy at Stifel; tgt $40


Upcoming Events:

  • Econ Data:

  • 08:30 ET: Nonfarm Payrolls for Aug (Briefing.com Consensus 300K; Prior 528K)

  • 08:30 ET: Nonfarm Private Payrolls for Aug (Briefing.com Consensus 280K; Prior 471K)

  • 08:30 ET: Avg. Hourly Earnings for Aug (Briefing.com Consensus 0.4%; Prior 0.5%)

  • 08:30 ET: Unemployment Rate for Aug (Briefing.com Consensus 3.5%; Prior 3.5%)

  • 08:30 ET: Average Workweek for Aug (Briefing.com Consensus 34.6; Prior 34.6)

  • 10:00 ET: Factory Orders for Jul (Briefing.com Consensus 0.2%; Prior 2.0%)


  • Earnings:

  • Monday (Aug 29)

  • Morning: CTLT SLQT

  • Afternoon: HEI


  • Tuesday (Aug 30)

  • Morning: AMWD BIDU BMO BBY BIG CONN PLAB

  • Afternoon: AMBA CHPT CHWY CRWD HPE HPQ PVH


  • Wednesday (Aug 31)

  • Morning: BF.B DBI DCI VRA

  • Afternoon: AI COO CRDO FIVE GEF MDB NTNX OKTA PSTG SMTC S VEEV


  • Thursday (Sep 1)

  • Morning: FLWS BRC CPB CIEN GCO GMS MOMO HRL OLLI PDCO SAIC SCWX SIG TTC WB

  • Afternoon: AVGO CVGW JOAN LULU NCNO OXM PD SMAR SPWH




Asia & Europe detail:

Asia: Nikkei -0.04%, Hang Seng -0.7%, Shanghai Composite -0.05%

Equity indices in the Asia-Pacific region ended Friday little changed as markets turned their attention to the U.S. employment report and what it could mean for the Fed's monetary policy. It was a losing week overall for the major Asian indices, as investor sentiment was undercut by growth concerns, weakening currencies, and the poor performance of other foreign markets. South Korea reported a softer-than-expected CPI print for August, but the Bank of Korea said it expects inflation to remain at 5.0-6.0% for an extended period. The yen continues to weaken against dollar, taking out the 140 level and trading at a 24-year low against the greenback. Chengdu remains in lockdown for Covid testing while parts of Shenzhen are also in lockdown, according to Bloomberg. China set the yuan reference rate at 6.8917, which is the weakest since August 2020.

  • In economic data:

  • South Korea's August CPI -0.1% month-over-month (+0.3% expected; last +0.5%) and +5.7% year-over-year (+6.1% expected; last +6.3%)

  • Japan's Monetary Base +0.4% year-over-year (+3.1% expected; last +2.8%)


---Equity Markets---

  • Japan's Nikkei: -0.04% (-3.4% for the week)

  • Hong Kong's Hang Seng: -0.7% (-3.6% for the week)

  • China's Shanghai Composite: -0.05% (-1.5% for the week)

  • India's Sensex: +0.06% (-0.05% for the week)

  • South Korea's Kospi: -0.3% (-2.9% for the week)

  • Australia's ASX All Ordinaries: -0.3% (-3.9% for the week)

---FX---

  • USD/JPY: +0.1% to 140.30

  • USD/CNH: flat at 6.9154

  • USD/INR: +0.2% to 79.84

Europe: DAX +1.2%, FTSE +0.5%, CAC +0.5%

Major European indices have traded with a positive bias in front of the U.S. employment report, garnering some buying interest after Wall Street finished Thursday with a rebound-minded bias. The upside move today comes despite eurozone PPI hitting a record high 37.9% year-over-year in July. According to a Bloomberg survey, most economists expect the ECB to raise its key lending rate by 75 basis points at next week's meeting. Germany put up some soft trade numbers for July, adding to concerns about a potential recession brewing for the eurozone. Separately, the London Times reports that UK Chancellor Zahawi is pushing for some business support measures that were used during the Covid pandemic. EUR/USD +0.4% to 0.9988.

  • In economic data:

  • Eurozone's July PPI +4.0% month-over-month (+2.5% expected; last +1.3%) and +37.9% year-over-year (+35.8% expected; last +36.0%)

  • Germany's July exports -2.1% month-over-month (-2.3% expected; last +4.2%) and imports -1.5% month-over-month (+0.8% expected; last +0.1%)


---Equity Markets---

  • STOXX Europe 600: +0.5%

  • Germany's DAX: +1.2%

  • U.K.'s FTSE 100: +0.5%

  • France's CAC 40: +0.5%

  • Italy's FTSE MIB: +0.9%

  • Spain's IBEX 35: +0.1%

---FX---

  • EUR/USD: +0.4% to 0.9988

  • GBP/USD: +0.2% to 1.1560

  • USD/CHF: +0.1% to 0.9831

1 view0 comments

Recent Posts

See All

The S&P 500 futures are up 3 points and are trading % above fair value. The Nasdaq 100 futures are up 9 points and are trading roughly in-line with fair value. The Dow Jones Industrial Average futures